In the second part of his three-part series on how to sell on Amazon, you will learn how to research products, how to obtain a product and how to optimize your product list and how to ship your product to an Amazon compliance center.
Start an Amazon FBA private label
Now that you are familiar with the Amazon FBA process, we can get to the most important part of the guide, and probably the main reason you are here, to start your own FBA private label business.
The steps from zero to hero through which you must pass can be divided into two meta sections:
a) Steps you must follow before your product arrives at an Amazon compliance center:
- Product / market research Procurement of a product Browse by the central vendor and list your product
b) Steps you must follow to launch your product successfully after it reaches an Amazon compliance center:
- Sending your product Launching and marketing your product – Obtaining your first sales and revisions
The way an Amazon FBA private label business scales is simple: perform the same process and add more products. Rinse and repeat.
Product research
Product research is the first step and the MOST important in the process. It is the basis of your operation and you can make or break your business. Finding the ideal product to sell on Amazon can be a tedious process, but you have no other choice: you must do it and you must do it correctly.
Product research is a numbers game. Get over. There is simply no room for emotions and preferences. The market does not care about your likes and dislikes. Of course, you should always try to do business in a niche that interests and excites you, give you a competitive advantage because it makes your job more pleasant, but also keep in mind that boring companies make billionaires. You want to launch a product that is not too competitive, but there is a great demand in the market for it.
So, how to find a product with high demand and low competition?
You analyze the market and you understand what the numbers say. You can start your product research analysis manually, but moving around Amazon without thinking and without any indicator will not get you anywhere. That’s why we recommend using product research tools such as those offered by Jungle Explorer, Helium 10, Viral Launch, Unicorn Smasher or other people. All these product research tools have different algorithms and ways to get to the numbers they are showing, plus their accuracy is more or less the same. Of course, these product research tools have no way of knowing the real numbers that only Amazon has, but if you use them correctly, they will take you much further than your own heuristic way of generating information, much less. hour. The fact that most of Amazon’s vendor industry (if not the whole) trusts them is a good example.
The mental model
Suppose, to simplify, that you want to earn ~ $ 1000 in earnings per month by selling your branded product on Amazon. This is your goal Your placeholder Once you get this, you will begin the search for a profitable product by adapting the research to your goals. We are going to break it down even more.
If you are obtaining a reasonable profit margin of 25%, it means that your desired product must have a minimum monthly income of $ 4000. This is your first filter: you are looking for a product that generates at least $ 4000 of income per month for the principal competitors in the niche.
Next, you want a product that is easy to manufacture (you can basically do this and use common sense) and have little competition. What is low competition? It’s relative, but, in principle, you want to see a couple of sellers on the first page with less than 50-100 comments, sellers with 3 to 4-star ratings along with bad reviews, bad photos or not optimized ads. You can compete with that.
Avoid niches dominated by a seller with more than 1000 reviews and a rating of 4+, or niches in which Amazon is selling its products. You can not compete with that.
Well, then you found a product that has a high demand (generates a minimum of $ 4000 per month according to our arbitrary standards) and has low (or bad) competition, what’s next? Next, you want to place that product in your product tracker and monitor its performance for approximately two weeks. If the numbers look good, the next thing to do is estimate your earnings.
Pro tip: Make sure you get the next correct part. This is critical
Start by getting the exact measurements and the weight of the product (with the packaging) and then calculate the total shipping costs to get the product from your supplier to the Amazon compliance center. Once you get this, use Amazon’s FBA calculator to calculate all FBA rates. Next, you must add all your initial costs (samples, graphic design, photography, inspection costs and any additional costs), your fixed costs (product cost and total shipping costs) and Amazon FBA costs (PPC estimated) / other marketing costs and FBA rates), and divide this number by the number of units you requested to obtain the total cost of the product.
To obtain your profit margin, simply subtract the total cost of the product from the retail price of the product.
Total cost of the product = (initial costs + fixed costs + amazon fba and other marketing costs) / number of units ordered
Benefit = Retail price – Total cost of the product
If you are personally satisfied with the expected profit margin, congratulations! You have found your niche!
Now you want to start thinking about your competitors. How can you diversify your product, how can you improve it and make it superior to the products of your competition? Begin to review the bad reviews in your competitor’s list and analyze them. Find the pattern, there is always a pattern, and see if you can find ways to mitigate problems that customers are not satisfied without incurring additional production costs.
Providing your product
Now that you have reduced your research to a single product, the next step is to get your product looking for a good supplier.
The most common place where people will look for suppliers is Alibaba.
Alibaba is a website that connects suppliers with individuals or companies and, in its current form, is your safest bet when looking for a reliable provider because many of the vendors are already configured to serve Amazon FBA companies.
You should also always check and compare your potential suppliers with suppliers at 1688.com or Global Sources. The previous website is only in Chinese, so you should use Google Translate and fight a little with your searches, but it’s worth it because 1688.com is more oriented to Chinese buyers, which means you’ll see the real thing. . deflated prices. When you find some potential suppliers on Alibaba, be sure to check your rates with the same or similar products on 1688.com. It is very likely that the prices there are significantly lower (because knowledgeable business providers in Alibaba are trying to get foreigners out of their money), and you can take advantage of this information later when negotiating with your chosen supplier.
When looking for a supplier on Alibaba, always check the gold supplier box and ignore suppliers with grim qualifications. When you find a potential provider that meets your standard, mark it as a “favorite” and continue your search until you have potential 10-15 providers in your favorite bar (top right corner next to the search bar). From here, you can email everyone at once.
How to send emails to suppliers?
There are many email templates on the Internet that give you examples of how to establish the first contact with your potential suppliers. Browse them and follow the famous advice of Bruce Lee: “Absorb what is useful. Reject the useless. Add what is essentially yours”.
Although the content and style of emails are largely arbitrary, there are a couple of basic principles that you must meet:
Introduce yourself as CEO of a company or as an employee of the purchasing department of an established company. This will make you look more professional and the provider will take you more seriously.
List your specifications as clearly and as detailed as you can. Be sure to use very simple English to avoid any risk of misinterpretation.
Ask them if they can meet their specifications and ask them to provide the following details:
Photo, specifications and quotation of EXW (Ex Works) Are they a manufacturer or a commercial company? Execution term for samples and trial order? Can you add a logo to the product? If yes, ask them to send images of the product with a random logo as a reference. What is the best rate they can offer for the trial order?
ALWAYS list your questions and make sure they respond to each one. If you skip some of your questions, call them and ask them politely to provide all the necessary answers.
Ask as many questions as you can in your initial emails to avoid endless progress with all providers.
Complying with these simple rules should be enough to cover all the bases and keep it out of trouble. Once you get some answers from the suppliers you contacted, you can start to test and evaluate your answers, choose your favorites from 1-3 and try to negotiate the best possible terms.
Supplier Evaluation
First impressions are very important in business. You are judging your potential provider from the first email interaction. Are they fluent in English? Did they give you a generic copy and paste response or did they care enough to answer you personally? Can you keep a quick conversation or take days to return the email? Communication is your first filter, and providers who do not pass the test should be disqualified immediately.
Once you have established a satisfactory level of communication with some potential suppliers, it is time to verify and evaluate the quality of your product. Normally, you will have to pay between $ 50 and $ 100 for the first samples of your products, and if you request samples from suppliers from 2-3 this could add up a considerable amount of cash; There is no way to avoid this, consider it a cost to do business.
Once you have received and inspected your samples, you may follow up with any additional questions, continue and tell your chosen supplier that you will place your first order. If you are ever going to negotiate the price of the product and the method of payment, it is when you do it. Just make sure you have done your research and be professional and realistic with your expectations. If you have established sufficient trust with the supplier, you can make arrangements to pay 30% or 50% in advance and the remaining 50-70% after the inspection and before shipment. Regarding the payment process, insist that everything is done through Alibaba (read our Alibaba Guide) and the trade assurance program – minimizes the risk by guaranteeing the refund of the money in case a supplier does not comply with the terms of the order contract.
Once you have successfully obtained your first product, it is time to create a list of products and organize transportation to an Amazon compliance center.
Create an optimized product list
The actual step-by-step process to create a new product list in Amazon Seller Central is quite intuitive and there are thousands of guides (including the one from the Seller’s University) that teach you how to do it. However, simply creating a list of products is not what you’re here for. You are here to learn how to rank your product on the first page of Amazon by optimizing your listing.
What does optimization mean on the page? It means that once your product is active, Amazon’s A10 algorithm will analyze your listing and analyze the content to determine what it is selling. It will then categorize its content on the page, mix it with other classification signals and place (classify) your product in a certain position according to what consumers are looking for.
Before delving into the optimization of the product on the page, there is one more thing you should know: when it comes to ranking, sales are above all. The sales, speed, revisions and price, in that order, are the key factors that will determine your destination in the market and the position you occupy among your competitors. You can have the best possible optimization on the page, but if you are not selling, you will not go anywhere. Needless to say, if you are selling like crazy, Amazon will place it on the first page, even if its optimization on the page is terrible. All Amazon cares about is making money, and they do so by charging fees and a percentage of their sales. In other words, if you earn money, they earn money, and the A10 algorithm is designed to guarantee exactly that.
That said, you can do the best you can, but ultimately, you can not control how much you sell. The market does that. All you can do is concentrate on the things that you have control over, and this is where the optimization of your listing is done.
The list of Amazon products can be broken down into these six simple steps:
Title of the product list – Do your keyword research correctly and put the most relevant keywords relevant to your product in your title. Do not fill it in with different keywords 10; it will not help you sort, it will only dissuade customers who found your listing in some way. Stick to the Amazon rules and keep the title under the characters 200. Use pipes (|) and hyphens (-) to divide the target keywords and improve readability, and do not forget to include your brand name.
- Do your keyword research correctly and put the most relevant keywords relevant to your product in your title. Do not fill it in with different keywords 10; it will not help you sort, it will only dissuade customers who found your listing in some way. Stick to the Amazon rules and keep the title under the characters 200. Use pipes (|) and hyphens (-) to divide the target keywords and improve readability, and do not forget to include your brand name. Bullet Points – This is where you sell your products once you attract the customer to click on your list. Writing high conversion points that sell has to do with finding that sweet balance between writing old school texts and SEO writing of the new school. Try to show all the benefits of your product and why it is better than what your competitors offer. Include as many primary and secondary keywords without ruining the copy, add social tests whenever possible. Think like a customer; What would you like to know about the product if you were the one who bought it?
- This is where you sell your products once you attract the customer to click on your list. Writing high conversion points that sell has to do with finding that sweet balance between writing old school texts and SEO writing of the new school. Try to show all the benefits of your product and why it is better than what your competitors offer. Include as many primary and secondary keywords without ruining the copy, add social tests whenever possible. Think like a customer; What would you like to know about the product if you were the one who bought it? Description – Unless you are registered in the Amazon Trademark Registry and can publish Enhanced Brand Content, do not worry too much about this section. Nobody reads this. You can use the description to tell the customer a little more about your brand, create a good relationship, etc.
- Unless you are registered in the Amazon Trademark Registry and can publish Enhanced Brand Content, do not worry too much about this section. Nobody reads this. You can use the description to tell the customer a little more about your brand, create a good relationship, etc. Back-end search terms – Place as many keywords as possible in this section and prioritize long-tail keywords that already contain other main keywords. The order does not matter, this part is quite simple.
- Put as many keywords as possible in this section and prioritize long-tail keywords that already contain other main keywords. The order does not matter, this part is quite simple. Optimized images – Images are possibly the most important part of your listing. Leaving aside the classification, the image of the product is the first thing your customers see and, after the price, is the biggest deciding factor in conversions. So, do not be fooled and pretend that you are an expert, just hire a professional Photographer and send them a sample of your product.
- The images are possibly the most important part of your listing. Leaving aside the classification, the image of the product is the first thing your customers see and, after the price, is the biggest deciding factor in conversions. So, do not be fooled and pretend that you are an expert, just hire a professional Photographer and send them a sample of your product. A / B tests – If you really want to maximize the optimization of the listing on the page, you want to run A / B tests. Basically, this means that you will be running two slightly different versions of your page, where 50% of customers see the page A and 50% see page B. This method allows you to gather information and determine which version of your listing works best! Divided It is one of the services you can use for this.
Finally, it is totally fine if you do not want or do not have time to learn to optimize your listing by yourself. You can always go to the Jungle Scout Market and find guys who have been doing this or years. The price of optimization services for your listing ranges from $ 50-100 $, which is not really much when you consider the ranking implications of your listing.
Once you have created the list of your products and have become accustomed to browsing Seller Central, it is time to organize the shipment!
Sending your product
The shipping can be a bit intimidating for the Amazon FBA beginner sellers. You can easily find yourself in a situation where you do not understand the foreign terms that the supplier is using or does not understand the shipping process, customs, tariffs or inventory labeling. At the end of the day, the sending can be really simple once you understand the essentials, and this entire chapter can be summarized in two or three sentences. However, we will continue to review all the shipping terms and methods one by one, so that you know exactly what you are doing and do not look confused in front of your provider.
In general, you have two options from the beginning: you can arrange the shipment by yourself or let your provider do it for you. In most cases, it is best to leave the shipping arrangements to your provider because it is very likely that you have already established a business relationship with a carrier, which makes the process much easier for you. Request the budget, pay the money and wait for the product to reach the Amazon compliance center. Many times this option will not only be the easiest, but also the least expensive. However, the biggest problem with this approach is that whenever you have problems with customs or something, you should contact the carrier through your supplier, which means you will not have much control over the operation.
If you are a type of practical person, you can contact a carrier or freight forwarder and arrange the shipment by yourself. It’s a little more work, but it’s always worth having more freedom. You can contact all the suppliers you want and choose and choose the best offer, haggle the charges and, most importantly, when your business starts and start ordering large shipments frequently, you will have an established relationship with your supplier and Essentially you will become a trusted business partner.
If you choose to go this route, read the following breakdown of the most essential information required to begin:
Carrier vs freight forwarder – A carrier is any company or individual that takes the product from one place to another for you. A freight forwarder can outsource transportation to a third-party company or can do the work of a carrier. The difference is that a cargo agent supervises the entire process; They deal with customs documents, entry fee, ISF, bail and everything that must be arranged so that your shipment is from point A to point B. The most well-known and recognized cargo agents are DHL, FedEx and UPS. .
- A carrier is any company or person that takes the product from one place to another for you. A freight forwarder can outsource transportation to a third-party company or can do the work of a carrier. The difference is that a cargo agent supervises the entire process; They deal with customs documents, entry fee, ISF, bail and everything that must be arranged so that your shipment is from point A to point B. The most well-known and recognized cargo agents are DHL, FedEx and UPS. . Customs Agent – Every time your products go from one country to another, you are dealing with two different jurisdictions, which means that some documents and applications must be completed for your products to cross the border. You can do it only if you are stupid, or you can ask a professional to do it for you. Freight agents often have an internal customs agent, so you do not have to worry about this.
- Every time your products go from one country to another, you are dealing with two different jurisdictions, which means that some documents and applications must be completed in order for your products to cross the border. You can do it only if you are stupid, or you can ask a professional to do it for you. Freight agents often have an internal customs agent, so you do not have to worry about this. Ex-works – Ex works is a contractual term that basically means that you will pay the supplier to build your product and prepare it for collection at your location, leaving everything else to you. You need to find a freight forwarder, arrange transport and so on. The factory fee is the price of the product, excluding shipping costs.
- Ex works is a contractual term that basically means that you will pay the supplier to build your product and prepare it for collection at your location, leaving everything else to you. You need to find a freight forwarder, arrange transport and so on. The factory fee is the price of the product, excluding shipping costs. Ship vs plane – As a general rule, you want to send your first shipment by air, even if it is more expensive. Why? Because it is much faster and you want to get your first product on the market as soon as possible to take the lead. If your product starts, you will want to order your second or third shipment by sea (it takes approximately one month approximately, excluding the delivery time) to save some money and increase your profit margins.
- As a general rule, you want to send your first shipment by air even if it is more expensive. Why? Because it is much faster and you want to get your first product on the market as soon as possible to take the lead. If your product starts, you will want to order your second or third shipment by sea (it takes approximately one month approximately, excluding the delivery time) to save some money and increase your profit margins. FCL vs LCL – If you make a shipment by sea, you will eventually find these two acronyms. They are short for “full container loading” and “less than container loading” and mean exactly what you think they mean. As you may have guessed, the FCL shipment is more affordable.
- If you make a shipment by sea, you will eventually find these two acronyms. They are short for “full container loading” and “less than container loading” and mean exactly what you think they mean. As you may have guessed, the FCL shipment is more affordable. FOB – Short for “free on board”, this term only applies to shipping by sea, and means that you are paying your supplier to make the product, get it on board and authorize it at the customs in your country. The rest is in you.
- Short for “free on board”, this term only applies to shipping by sea, and means that you are paying your supplier to make the product, get it on board and authorize it at the customs of your country. The rest is in you. DDU vs DDP – Abbreviation for “service delivered not paid” and “service delivered paid” respectively. Once again, it is exactly what it sounds like. With DDU, the product will be delivered, but will have to be presented at customs to pay the fees. It is an unnecessary inconvenience. With DDP you pay your supplier or your freight forwarder and they do absolutely everything for you. It’s more expensive, but you get your product from China (probably) to an Amazon compliance center without a single worry.
As production ends, you must create a shipment at the central vendor. This gives you the physical address of the dispatch center where you will send your products. In your Seller Central account, click on Inventory> Manage Inventory and then click on the drop-down menu of the product you are requesting (where we think about how to list it in section 3) and select Send / Replace Inventory. You will be asked if you want to create a new shipping plan or add an existing one.
Since this is your first shipment, choose “Create new shipment” and then in the “Send from” field enter the address of your supplier if you are using the supplier to ship your product, or the address of your freight forwarder if you are using a loading agent. . Once you have followed all the steps (select the number of units you will ship, skip the Amazon preparation, verify the information, use the small package delivery, print the shipping labels) Amazon will give you the address of the exact fulfillment center . Send this address to your supplier or loading agent and you’re done.
Professional advice: try to have your supplier apply the FN SKU Bar codes on the packages. Usually, they are happy to do this for free, while Amazon will charge you pennies 20 per unit.
Inspection
When your supplier notifies you that everything is ready for shipment, it is time to inspect the quality of your products. You can hire a third-party online inspection company for somewhere between $ 100 and $ 300. It may seem a lot to you at this time, but consider that this is another cost of doing business.
Inspections are always a good idea when working with Chinese suppliers (especially for the first time) because there are many things that can go wrong; The supplier may have poor manufacturing quality control and sell defective products, or give you incorrect measurements of weight and size that cause unforeseen problems with Amazon. Everything must be just before the product gets on that plane: the logo, the packaging, the labels, the product itself, everything! You can not afford to ruin this. Amazon customers have very high expectations and will not hesitate to leave a bad review and ruin your rating. This is one of the worst things that can happen because reviews are important at Amazon. If you receive any negative criticism during the first or the first two weeks of its release, your sales will plummet. And if your sales fall and you lose momentum, the classification of your product will sink as a result and you may never recover.
Communication is key when it comes to a third party inspection company. When you hire them, be sure to create a long list of listed requirements and really get the value of your money. The list should include things like:
Try randomly 1/3 of the products; Inspect the quality of moving parts (if any); Release the shipping box for feet 2 (this will make your provider angry, but who cares?); Weigh and measure the product; Send me a video or images of the product, and so on, you will get the point. Anything that comes to mind: ask them to do it, the better they do the inspection of the product, the better.
Once you get the green light from the inspection company, you can transfer the rest of the money and your product is ready to ship.
This is the end of Part 2 of the definitive guide on how to sell on Amazon. In Part 3 we show you how to properly launch your product and optimize your ad campaigns sponsored by Amazon.